Check 21 Comes of Age
WASHINGTON – Four years after passage of Check 21, the federal law that makes electronic images the same as legal tender has apparently come of age, with conversion of paper-to-electronic transactions exploding in the latter part of 2006. Data provided by the National Clearing House, which provides settlements for 608 financial institutions nationwide, show the number of items exchanged for 2006 more than tripled from the previous year to 670 million with a value of $626 billion. And images settled as a percent of total number of NCHA’s overall volume went from less than 1% in 2005 to 27% for 2006. Dallas-based NCHA also provides settlements for the Endpoint Exchange and Viewpointe networks. SVPCO-Electronic Clearing Services, which provides settlements for 17 of the world’s biggest banks, reported that the number of checks exchanged electronically in 2006 through its system surged 15-fold and the dollar value grew five-fold, compared to 2005. In comparison, the Federal Reserve reported just a 40.8% increase in dollar value for electronic image.